POSCO Ordered to Pay 2.4 Billion Won to Subcontractor Workers
POSCO is facing the prospect of having to disgorge tens of billions of won in discriminatory wages after a court recognized that the company treated workers it should have directly hired discriminatorily by employing them through subcontractors. With more related lawsuits pending, the compensation c
South Korean steel giant POSCO faces a potential payout of 24 billion won ($17.3 million) to workers it treated discriminatorily through subcontractors, according to a ruling by the Gwangju District Court in Suncheon. The court ordered POSCO to compensate 59 individuals, with the ruling covering wage differences and delayed interest.
This decision comes after the Supreme Court ruled in July 2022 that the workers should have been directly employed by POSCO. The court calculated the wage difference using the standards of the newly created operation synergy job group, which POSCO set up when it announced direct employment in April. However, the court found that there were no regular POSCO employees performing the same work as the plaintiffs.
POSCO argued that the calculation period should only cover the last three years from the lawsuit filing date, but the court determined that the prescription had been suspended when the plaintiffs filed their employee status confirmation lawsuits in 2011 and 2016. The ruling affects about 2,300 subcontracted workers who participated in lawsuits for employee status confirmation.
The case has the potential to increase POSCO's compensation costs further as more related lawsuits are pending. POSCO has stated that the wage difference claim lawsuit is a significant burden, and it plans to appeal the decision, emphasizing that direct management duties are not comparable to the plaintiffs' jobs. The Suncheon Branch of the Gwangju District Court also recognized the employee status of 849 out of 906 plaintiffs in the first trial of the 8th and 9th lawsuits for employee status confirmation.
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